I need to take a loan out to cover a few bills for Christmas and want to pay it back as soon as possible – what’s the best way to approach my lending provider? Marie, Kilkenny
A good place to start would be your local credit union. Most credit unions have short term loans that are designed to help members with those times when a little extra money is needed - like Christmas and the start of the school year. Rates are usually low and in many cases you can pay off the entire loan at any time without a penalty. You do need to be a member and have shares (money on deposit) before you can borrow from a credit union though.
If you have good credit, another source of cheap (and sometimes free) short term finance is a credit card with an introductory purchase rate. The best available at the moment is the Tesco Clubcard credit card which has a 0% introductory purchase rate for eight months. Bank of Ireland and Ulster Bank also offer credit cards with 0% introductory purchase rates for six months. Any of these cards could help you with your Christmas expenses and provided you pay the money back before the introductory purchase period is over, they won't cost you anything. Do be sure of yourself before applying for a credit card though. They can be a lifeline, but they can also leave you in deep water very quickly.
Our banks generally don't like to deal in small short term unsecured loans, and it's well known that many people are finding it very difficult to obtain personal loans from them. Instead you may consider applying for a personal overdraft. If you're approved, you can generally overdraw an amount that is equal to your monthly income and of course it can be paid back at any time. Overdrafts can be pretty expensive though, as they have fees and high interest rates.
There are also money lending services that provide cash loans and collect payments weekly from your home. These services are becoming popular but they are extremely expensive and you can expect to pay well over 50% interest on your loan.
Personal Finance Expert Simon Moynihan from www.bonkers.ie, a financial comparison site, is here to answer your money queries. If you've a question you'd like Simon to answer for this column, please contact Woman's Way directly through publisher www.harmonia.ie.
This piece appeared in the December 5th edition of Woman's Way which went on sale November 29th